"The Never Ending Story" (continued) of Goods and Services Tax Claims in Bankruptcy
Date:
September 10 2010
Roger P. Simard follows up on last year’s article “The Resurrection of Goods and Services Tax Claims in Bankruptcy” (2009) 25 B.F.L.R. 193, also available on this website at http://fr.fmc-law.com, on the rights of the Crown to the tax portion of accounts receivable of a bankrupt. A recent Supreme Court of Canada decision on this subject is commented and should have resolved the issue. However, a subsequent Tax Court of Canada decision upheld by the Federal Court of Appeal, raises somewhat similar issues in factual circumstances that slightly differ from the Supreme Court facts: the formal “requirement to pay” had been served before the initial bankruptcy event. The controversy between the Quebec Court of Appeal view on the matter, and the opposite views of the Federal Court of Appeal and other provincial Court of Appeal result in a non-uniform application of bankruptcy and tax legislation in Canada, paving the way to another visit to Ottawa. A motion for leave to appeal was filed in the Supreme Court of Canada in September 2010.
Originally published in Banking & Finance Law Review, Carswell, No. 26.1, September 2010, 26 BFLR 153.
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